In this paper, natural convection heat transfer is studied in two-dimensional horizontal concentric cylindrical annulus with discrete source-sink pairs. The effects of Cu nanoparticles on natural convection of water near its density maximum were considered in numerical simulations. Geometry consisting of two hot and cold sources (constant temperature) with different arrangements and the remained parts were assumed to be adiabatic. The governing equations were formulated using both the Boussinesq (B) and non-Boussinesq (NB) homogenous models and were solved on a non-uniform mesh using a pressure-based finite volume method. The computations were carried out for Pr = 13.31, Rayleigh number from 10(4) to 5 x 10(5) and volume fraction of nanoparticles from 0 to 0.08. This work with pure fluid and nanofluid was validated by previous studies and the results were shown in three cases under investigation. The results were presented from streamlines and isotherms flow field, local and average Nusselt number. It was found that different arrangements by different angles and density inversion affected founding best state of heat transfer in each case and general enhancement of heat transfer was obtained by adding volume fractions of nanoparticles, so average Nusselt number increased and an optimum design was also found. It was concluded that the B approximation in comparison to NB approximation gave rise to the higher heat transfer rate. The findings showed that which of cases was applicable to optimization design in industry and especial in heat exchanger. (C) 2016 The Society of Powder Technology Japan. Published by Elsevier B.V. and The Society of Powder Technology Japan. All rights reserved.